China Wine market for 2022
trends 2022
The future of wine in China is exciting and wide-ranging. The country experienced tremendous growth in the early 2000s, and now is experiencing a strong market appetite for quality, affordable wine. With more than 20 million bottles sold annually, China is one of the world’s most extensive wine markets and an essential part of the global wine trade. In order to maintain its position as a leading wine market, it’s important for wine companies to stay on top of the latest developments in wine marketing. The future of wine in China is unpredictable, but with the right strategy, it can grow and become even more popular with consumers.
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South African Wine are popular in China
When the Chinese celebrate the Spring Festival, a time of family reunions and feasts, South Africa celebrates the birth of its wine industry. It's a serendipity because the South African wine industry can take advantage of the booming Chinese market, which grows all the more during the country's most important festival.
On February 2, South African winemakers toasted the 363rd anniversary of their industry, the only one in the world to have an official anniversary. The story of the first wine made in South Africa can be found in the diary of Johan Anthoniszoon van Riebeeck, an employee of the Dutch East India Company who arrived in 1652 to take up his post.
He is credited with establishing a black grape (red wine) vineyard in present-day Cape Town. He wrote in his diary on February 2, 1659: “Today, God be praised, wine was made for the first time from Cape grapes”.
France, on the other hand, began producing wine in the 5th century BC. It is therefore not surprising that French wine dominated the Chinese market in imported bottles until 2015, accounting for 42% of total volume and 46% of total value.
However, a rival that started producing wine much later – around the 19th century – has caught up: Australia.
In 2019, Australian wine brands captured more than 35% of the Chinese market, relegating French wine to second place with around 29%. Market watchers attributed this to the Sino-Australian free trade agreement that came into force in December 2015, reduced tariffs, the proximity of the two countries and the increase in the number of students and tourists. Chinese in Australia.
Yet this year, the market share of South African wine in China was less than 1%.
Sino-Australian relations
Things started to change drastically in 2020. Bilateral Sino-Australian relations deteriorated and China began imposing tariffs on a range of Australian products from barley to mining products. An anti-dumping investigation was also carried out on Australian wine following a complaint. Tariffs, from 107-212% on Australian wine set from March 26, 2021, have been increased to 116-218%, a measure that will remain in place for five years. While Australian wine companies lost almost 94% of the Chinese market compared to 2019, South African wine saw an increase of more than 100% in the same year. Even more dramatically, in 2020, the increase was almost 190%, according to data from Wines of South Africa (WoSA), a non-profit organization promoting the export of South African wine.
The opportunity created by the restrictions on Australian wine has been a lifesaver for the South African wine industry which has endured lockdowns and four periods of domestic sales bans during the pandemic, resulting in the loss of 21,000 jobs so far. October 2020, according to WoSA.
As South African winemakers pin their hopes on the Chinese market, Marcus Ford, Asia market manager at WoSA, remains optimistic about the future even if China and Australia decide to reconcile. “There is still huge potential for South African wine businesses to expand in China, regardless of any geopolitical issues,” he said. And to add, “Our strategy is to work with both producers in South Africa and importers here [in China] to push and promote the industry. We have tripled our market share over the past 18 months, which is obviously very encouraging.”
The WoSA runs several programs in China throughout the year to educate Chinese consumers about South African wine and introduce more winemakers. Despite the pandemic and travel restrictions, their annual tour continued last year, bringing 36 wine producers and over 350 types of wine to Beijing, Shanghai, Shenzhen, Chengdu and Xiamen in the fall. The WoSa has also participated in major exhibitions such as the China International Import Export (CIIE) in Shanghai.
For many brands, China represents a potential new market. They hope to expand their range of products and services there, and to expand their reach beyond the country’s traditional clothing and accessories industries. While many brands have already established sales operations in the country, there is an increasing number of brands aiming to establish a presence in the country’s growing fashion market.
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